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As the likelihood of a US government shutdown grows, the Securities and Exchange Commission (SEC) is reportedly aiming to accelerate the approval process for Ethereum Futures exchange-traded funds (ETFs), as stated by senior Bloomberg analyst Eric Balchunas.
In contrast, the SEC continues to be cautious regarding the approval of spot Bitcoin ETF applications, having recently postponed its decisions on several submissions.
An Ethereum Futures ETF Likely to Launch Soon
According to Eric Balchunas, the SEC has provided filers with a 48-hour window to revise their applications, which will conclude on the afternoon of Sept. 29, allowing the ETF products to become effective on Oct. 2 and commence trading on Tuesday, Oct. 3, 2023.
Balchunas, along with fellow Bloomberg ETF analyst James Seyffart, previously estimated a 90% probability that Ether futures ETFs will start trading in early October, with Valkyrie’s Bitcoin and Ether ETF positioned to be the first.
Valkyrie has submitted a request to the SEC to modify the investment strategies of its existing Valkyrie Bitcoin Strategy ETF to incorporate exposure to ether futures contracts. Meanwhile, Seyffart and Balchunas expect that the inaugural pure Ether futures-based ETF will be launched by Volatility Shares, anticipated to become effective on Oct. 11 and debut on Oct. 12.
However, both Bloomberg ETF analysts foresee that not all of the 15 Ethereum futures ETFs submitted by 11 applicants will be launched. In addition to Valkyrie and Volatility Shares, other issuers include Grayscale, VanEck, Bitwise, and ProShares.
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When Spot Bitcoin ETF?
In his most recent update, Balchunas revealed that the SEC is eager to expedite the launch of Ether futures ETFs ahead of a potential government shutdown in the United States. The shutdown could commence on Sunday, Oct. 1, if Congress does not pass the funding legislation by the end of September.
SEC chair Gary Gensler has already indicated that the Commission will function with a minimal staff if a government shutdown occurs. He noted during a hearing on Sept. 27 that over 90% of its employees would face “unpaid furloughs,” leaving a small number of staff to perform essential tasks, while responses to whistleblower complaints and investigations “will come to a standstill.”
As the SEC is reportedly preparing to approve some Ethereum futures ETFs, all spot Bitcoin ETF applications may remain in limbo if the government shutdown takes place.
To date, the SEC has not yet granted approval for a spot Bitcoin ETF in the United States, although it has authorized BTC ETFs based on futures. Recently, four US lawmakers urged the regulatory body to promptly approve spot BTC ETFs, arguing that it is illogical for the regulator to continue favoring futures ETFs over spot products, as there is no significant distinction between the two.
The SEC subsequently postponed its decisions on filings from Ark Invest, 21Shares, and Global X, with the former’s deadline extended to January 2024. Other spot Bitcoin ETF applications are expected later in October.
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